Can a defense lawyer send an insured client's detailed legal bills to the insurer's outside audit company, and may the lawyer ask the client to consent?
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This page answers the general question as of 2026. Ezel answers yours: whether it's allowed on your facts, under the current Oregon Rules of Professional Conduct, with citations.
Plain-English summary
A lawyer represents a client whose insurance carrier is paying the bills, and the carrier asks the lawyer to submit the client's detailed bills to a third-party audit service. The opinion addresses whether the lawyer may submit the bills at the carrier's request, and whether the lawyer may ethically seek the client's consent to submit bills that contain information relating to the representation. It answers the first no, qualified, and the second yes, qualified.
The opinion starts from the insurance-defense framework: absent an agreement otherwise, a lawyer who defends an insured generally has two clients, the insurer and the insured, and must treat the insured as the primary client whose protection is the lawyer's dominant concern (citing OSB Formal Ethics Op. No. 2005-121). It then applies Oregon RPC 1.6: if the bills contain no protected information, the lawyer may submit them; if they do, the lawyer may not disclose them absent an applicable exception, which in effect means not without the client's consent. The opinion notes the lawyer may need to discuss with the client the risks the submission could carry, such as inappropriate disclosure of protected information, waiver of the lawyer-client privilege, or adverse effects on the insurer-insured relationship.
On seeking consent, the opinion applies Oregon RPC 1.7 and the Oregon RPC 1.0 definitions of "informed consent" and "confirmed in writing." Whether the insurer's demand to provide confidential client information to a third party gives rise to a conflict, and whether any conflict is waivable, depends on the specific facts. Citing Washington Advisory Op. No. 195, New York State Bar Op. No. 1999-716, and a Massachusetts informal opinion, the opinion concludes that unless a nonwaivable conflict exists, it is permissible for the lawyer to ask the client for consent.
In practice
The opinion holds that the duty of confidentiality controls the disclosure of detailed bills: protected information cannot go to the insurer's auditor without the insured's informed consent, and the request to disclose is analyzed for conflict under Oregon RPC 1.7. Per the opinion, the analysis turns on whether the bills contain Oregon RPC 1.6 information and, if consent is sought, whether the situation presents a waivable or nonwaivable conflict; only a nonwaivable conflict would make even asking for consent improper. Verify the current text of Oregon RPC 1.6 and 1.7 before relying on any specific point.
Common questions
Q: Can a defense lawyer send the insured's detailed bills to the insurer's outside auditor?
A: Only if the bills contain no protected information. The opinion concludes that bills containing Oregon RPC 1.6 information may not be submitted without the insured's consent or another exception.
Q: Can the lawyer ask the insured client to consent to the disclosure?
A: Yes, qualified. The opinion concludes that unless the situation presents a nonwaivable conflict under Oregon RPC 1.7, the lawyer may ethically seek the client's informed consent.
Q: What should the lawyer discuss with the client first?
A: The risks. The opinion notes the lawyer may need to discuss risks such as inappropriate disclosure of protected information, waiver of the lawyer-client privilege, or adverse effects on the insurer-insured relationship.
Background and rules framework
The opinion interprets Oregon RPC 1.6 (confidentiality of information relating to the representation) and Oregon RPC 1.7 (current-client conflicts), corresponding to Model Rules 1.6 and 1.7, in the insurance-defense setting where the lawyer typically represents both the insurer and the insured, with the insured as the primary client.
Citations and references
Rules of Professional Conduct:
- Oregon RPC 1.6 / Model Rule 1.6 (confidentiality)
- Oregon RPC 1.7 / Model Rule 1.7 (current-client conflicts; informed consent)
Cases:
- Evraz Inc., N.A. v. Williams, 2013 WL 6174839 (D Or 2013) (no tripartite relationship on the facts)
- United States v. Massachusetts Institute of Technology, 129 F3d 681 (1st Cir 1997) (privilege waiver on disclosure of bills to an auditor)
Other opinions cited:
- OSB Formal Ethics Op. No. 2005-121 (rev 2026) (insurance-defense conflicts; insured as primary client)
- OSB Formal Ethics Op. Nos. 2005-77, 2005-30 (rev 2026)
- Washington Advisory Op. No. 195; New York State Bar Op. No. 1999-716; Massachusetts Informal Op. No. 1997-T53
See also
- OSB Ethics Op. 2005-121: Insurance-Defense Conflicts
- OSB Ethics Op. 2005-77: Insured Defense After Coverage Work
- OSB Ethics Op. 2005-30: Insurer and Insured Simultaneous Representation
Source
- Landing page: https://www.osbar.org/ethics/toc.html
- Original PDF: https://www.osbar.org/_docs/ethics/2005-157.pdf
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